Latest news with #JamesHereford
Yahoo
13-02-2025
- Business
- Yahoo
Fairview rejects proposed merger with University of Minnesota, Essentia
Fairview is rejecting a proposal to join forces with the University of Minnesota and Duluth-based Essentia Health to create a new nonprofit health organization. In a letter to staff, Fairview Health Services CEO James Hereford and chair John Heinmiller said that while it is open to a partnership with the two organizations, "when it comes to a proposed merger between Fairview, the University, and Essentia – our answer is no." They continued to say that they believe operating as an independent entity is its best path forward after Fairview confirmed in late 2023 that it would not be extending its partnership with the U of M – known as M Health Fairview - when it expires in 2026. With the expiration looming, the university has been seeking a new partnership solution for the future, and announced last month an agreement had been reached with Essentia to create a new nonprofit that included a $1 billion investment from Essentia into the university's programs over the next five years. But the U of M saw Fairview as another crucial partner in the proposal, having worked with the company since its merger in 1997 that saw Fairview buy the University of Minnesota Medical Center amid a financial crisis at the university. But the relationship has become strained in recent years, with Fairview embarking on an attempted merger with South Dakota-based Sanford Health in 2023 that was opposed by the U and ultimately collapsed. Last year, the U launched an effort to buy back its hospital properties from Fairview, but has not been able to reach a deal with the company. It submitted its proposal for a new nonprofit earlier this week, saying: "We propose to combine in a single, unified organization the clinical enterprises of the University of Minnesota, including its UMPhysicians, Essentia Health, and Fairview Health Services." In its letter rejecting the merger, Hereford and Heinmiller said it's "essential" for Fairview "to maintain [its] independence," before adding: "Particularly where our mission, vision and values are not aligned with those of [the new nonprofit], we must be able to continue to make decisions about the care we deliver at Fairview." The Star Tribune suggests that these concerns could relate to Essentia Health's portfolio including historically Catholic hospitals that have alternative views on providing abortion, contraception, and gender-affirming care. But the proposal sent to Fairview said that while these Catholic facilities will continue to operate "consistent with the values and policies governing Catholic healthcare," Catholic policies "will not in any way govern activities at Fairview or University facilities or in University research, education, or other programs."
Yahoo
13-02-2025
- Business
- Yahoo
Fairview Health Services opposed UMN, Essentia merger
Fairview Health Services told its employees in a Wednesday letter that it does not agree to a proposed merger with the University of Minnesota and Essentia Health as part of a new health care organization announced in January. The U and Duluth-based Essentia Health in late January announced the partnership to develop a new nonprofit health care organization to include a $1 billion investment in the next five years. In a proposition to Fairview on Feb 10, University and Essentia officials further suggested that they and Fairview combine into a single organization called Newco. But, in the letter, Fairview CEO James Hereford and Board of Directors Chair John Heinmiller said that while the organization supports the University's endeavor to partner with Essentia, it would not agree to a merger. 'We have stated this clearly to the University: while we are open to a partnership, when it comes to a proposed merger between Fairview, the University, and Essentia — our answer is no,' the letter said. Hereford and Heinmiller said in the letter that they believed maintaining Fairview's independence and commitment to its patients is essential over joining the proposed company called Newco. 'Additionally, we continue to support the University's — or NewCo's — purchase of the academic assets, as laid out in the University's original five-point plan and reiterated in the (letter of intent) we both signed early last year,' the letter stated. If a new contract is not in place with the University by early 2027, Fairview would continue to own and operate the academic hospitals, and academic physicians would continue to practice there, according to the letter. Fairview officials also emphasized in their letter that Essentia's willingness to support the University was a good development, calling Fairview's current level of financial support of the school 'unsustainable.' With Fairview and the University's partnership set to expire in a couple years, a solution to sustain that commitment is urgently needed, said Chris Gade, University of Minnesota vice president for communications. But, when the University made an offer, Gade said, it received a negative response from Fairview and no counter-offer. That's when University officials shared their plans with Fairview to begin exploring alternative options, leading to the proposed solution that included the three organizations, Gade said. In the Feb. 10 proposal to combine the three organizations, the University laid out plans for a 22-member board that would initially include six appointees from each organization, board appointees and a non-voting Newco CEO. 'Newco will be the most comprehensive health care system serving Minnesota — the system with the broadest geographic coverage and reach, serving the most communities, and offering a complete range of care from basic primary care through the most complex, multispecialty care,' the Feb. 10 proposal states. Gade said U officials would like an opportunity to more fully explore the proposal with Fairview. 'And now today, what we're hearing is that they have chosen to say no to that solution that we believe is in the best interest of Minnesota. And that's perplexing to us because we have not had the level of conversation that we believe is possible about that solution and we would just welcome the opportunity to explore it more fully,' Gade said. 'And what we're proposing is a solution that alleviates from Minnesota putting the University's medical school at risk. And without a solution, we don't believe we can successfully educate and train the workforce.' The U medical center, which educates some 70% of the doctors and nurses in Minnesota, was sold to Fairview in 1997. What the University is proposing closely aligns to feedback from stakeholders across the state, as well as the governor's task force, Gade said. 'And what we've heard back from Fairview is, 'We would not like to pursue a transformational solution. Instead, what we're proposing is a transactional relationship,' and actually even doing that at rates lower than what they're currently providing to the university. So I think the option for Minnesota is transformational solution or a transactional relationship,' Gade said. Describing Fairview's level of investment made into the University as below average, Gade said that the health care provider's decision would not be good for patients or providers. 'And it's important for people to recognize that and to ask questions about it. Why has it been below average? I think that's a question that merits exploration and understanding. Our commitment at the University is to fulfill our commitment to the state of Minnesota and to our land grant mission and to patients and the healthcare workforce in Minnesota,' Gade said. 'And the other kind of important part of this is, this solution, as we proposed it, really will sustain existing patient relationships that patients have with their providers. What Fairview is saying, 'Let's break up those relationships.' And that's not good for patients, and that's also not good for the caregivers.' Fairview is Minnesota's third largest employer with more than 34,000 employees, more than 1.2 million patients in Minnesota and more than $8 billion in revenue, according to the provider. Fairview previously failed to persuade U officials to back a proposed merger with Sanford Health, based out of state in Sioux Falls, S.D. Sanford proposed combining their 58 hospitals, but announced in July 2023 that the deal failed after pushback from key stakeholders and regulators. Since February 2024, the University and Fairview have been in conversations about a new model of care agreement, and the two signed a letter of intent at that time with plans for the University to purchase the four academic health facilities that make up the M Health Fairview University of Minnesota Medical Center, with the U assuming full ownership of the facilities by Dec. 31, 2027. Essentia operates 14 hospitals and 80 clinics in Minnesota, including St. Mary's Medical Center in Duluth. 'Essentia Health's overriding goal has been and remains ensuring patients across Greater Minnesota and our entire service area have access to affordable, high-quality care – today and well into the future,' said an Essentia Health spokesperson in a statement Wednesday. The University's Board of Regents is expected to discuss the proposal for the new healthcare organization during its Academic Health Committee meeting Thursday and its full board meeting on Friday. 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